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AMERICAN RESCUE PLAN ACT US Department of the Treasury Interim Final Rule - Implementation of COVID State Fiscal Recovery Fund and COVID Local Fiscal Recovery Fund This document offers a high-level overview of funds deployed through the American Rescue Plan, with allocations for states and territories. Funds deployed to counties and cities are also mentioned. Ultimately, this document is intended to offer guidance to eligible entities that receive funds from the COVID State Fiscal Recovery Fund and the COVID Local Fiscal Recovery Fund on how to comply with necessary requirements for receiving these funds as well as what the funds can be used for. The interim rule is effective as of May 17. The open comment period for this rule ends July 16, at which point a final rule will be adopted and promulgated. Until that point, this guidance takes precedent. It is unknown at this time whether the guidance will change significantly based on the final comment period.
ARP STATE & LOCAL FISCAL
RECOVERY FUNDS
OVERVIEW:
• $350 billion for state, local, territorial, and Tribal governments to respond to the COVID-19 emergency
and bring back jobs.
• May 17th: Published in the Federal Register, open comment period until July 16 before Final Rule
FUNDING OBJECTIVES:
• Support urgent COVID-19 response efforts to continue to decrease the spread of the virus and bring
the pandemic under control
• Replace lost public sector revenue to strengthen support for vital public services and help
retain jobs
• Support immediate economic stabilization for households and businesses
• Address systemic public health and economic challenges that have contributed to the
inequal impact of the pandemic
ELIGIBLE JURISDICTIONS AND ALLOCATIONS:
• Direct Recipients
• States and District of Columbia ($195.3 billion)
• Counties ($65.1 billion)
• Metropolitan cities ($45.6 billion)
• Tribal governments ($20.0 billion)
• Territories ($4.5 billion)
• Indirect Recipients
• Non-entitlement units ($19.5 billion)
Illustration of sample below allowable uses of Recovery Funds, per new US Treasury
Guidance, more detail provided on following pages:
Support Public Health Response Address Negative Economic Impacts
Fund COVID-19 mitigation efforts, medical Respond to economic harms to workers, families,
expenses, behavioral healthcare, and certain small businesses, impacted industries, and the
public health and safety staff public sector
Replace Public Sector Revenue Loss Premium Pay for Essential Workers
Use funds to provide government services to the Offer additional support to those who have and
extent of the reduction in revenue experienced will bear the greatest health risks because of their
due to the pandemic service in critical infrastructure sectors
Water & Sewer Infrastructure Broadband Infrastructure
Make necessary investments to improve access to Make necessary investments to provide unserved
clean drinking water and invest in wastewater and or underserved locations with new or expanded
stormwater infrastructure broadband accessEXAMPLE USES OF FUNDS
1.
1. SUPPORT PUBLIC HEALTH RESPONSE
COVID-19 Mitigation & Containment Medical Expenses
A broad range of services and programming Provide care and services to address COVID-19
that are needed to contain COVID-19 public health needs, risks presented by new
variants and long-term effects of the virus
Behavioral Healthcare Public Health & Safety Staff
New or enhanced state and local government Responding to the public health and negative
services that may be needed to meet mental economic impacts of COVID-19 and requires
health, substance use, and other behavioral additional human resources
health needs
PROJECT EXAMPLES:
• Contract tracing • Local Public Health measure technical
• Emergency medical transportation assistance
• Establishment and operation of • Improvement of ventilation systems
telemedicine capacities • Establishment and maintenance of public
• PPE supply acquisition health data systems
• Vaccine education and site operation • Mental health treatment
• Temporary public medical facilities to • Increased number of state and local
increase treatment capacity government staff
• Related construction costs and other
capital investments to meet COVID 19
operational needsEXAMPLE USES OF FUNDS
2.
2. ADDRESS NEGATIVE ECONOMIC IMPACTS
Workers & Families Small Business
• Assistance to unemployed workers • Loans and grants to mitigate financial
• Job training, food, housing, cash, and hardship
other assistance to households • Loans, grants, and in-kind assistance to
• Survivor’s benefits for family members of implement COVID-19 prevention or mitigation
COVID-19 victims tactics
• Technical assistance
Public Sector Impacted Industries
Rehire staff, replenish state Unemployment Tourism, travel, hospitality, and other similarly
Insurance funds, and administer economic affected sectors
relief programs
PROJECT EXAMPLES:
• Assistance and job training for those • Nonprofits – assistance (loans/grants) or
looking for work other technical assistance
• Contributions to state Unemployment • Cash assistance to households
Insurance trust fund • Impacted industries - assistance (loans/
• Small business – assistance (loans/ grants) or other technical assistance
grants) or other technical assistanceEXAMPLE USES OF FUNDS
3.
3. PROVIDE EQUITY-FOCUSED SERVICES
Addressing Health Disparities Housing & Neighborhoods
Community health workers and public Services to support individuals experiencing
benefits navigators and community violence homelessness, and other housing needs
intervention programs
Educational Disparities Healthy Childhood Environments
New or expanded early learning services, New and expanded high quality childcare,
resources for high-poverty school districts home visiting programs for families with young
and education children, and services for child welfare-involved
families and foster youth
PROJECT EXAMPLES:
• Specific assistance for disproportionately impacted people and communities (program/
service/other) that is provided in a qualified census tract, this includes anything that is
provided to households, businesses, or people, such as: facilitation of access to social
services, programs/services that address housing insecurity or lack of affordable housing.
This includes such things as supportive housing programs that improve access to affordable
housing, development of affordable housing, and housing vouchers.
• Additionally, funds can be used for new or expanded early learning services, assistance to
high poverty school districts, and addressing the academic, social, emotional, and mental
health needs of students. Other eligible uses are new or expanded childcare, programs for
home health visits, and educational support for child welfare involved families and foster
youth.EXAMPLE USES OF FUNDS
4.
4. REPLACE PUBLIC SECTOR REVENUE LOSS
OPTION
1
Ensure Continuity of Vital Option One
Government Services Recipient’s average annual revenue growth
Funds used to provide government services over the three, full fiscal years prior to the public
to the extent of reduction in revenue health emergency
experienced due to COVID
OPTION
2
Lost Revenue Calculation Option Two
Recipients have two options to calculate 4.1% -- the national average state and local
lost revenue: revenue growth rate from 2015-18
PROJECT EXAMPLES:
• Funds may be used for the provision of government services to the extent of the reduction in
the recipient’s general revenue.EXAMPLE USES OF FUNDS
5.
5. PREMIUM PAY FOR ESSENTIAL EMPLOYEES
Prioritize Low- and Moderate- Key Sectors
Income Workers • Healthcare, grocery, and food services,
Those who face the greatest mismatch education, childcare, sanitation, and transit
between employment-related health risks • Must be fully additive to a worker’s wage
and compensation
PROJECT EXAMPLES:
• May use funds to provide premium pay to eligible workers of the recipient who perform
essential work or to provide grants to eligible employers, provided that any premium pay or
grants provided under this must respond to eligible workers performing essential work during
COVID-19. The funds must prioritize low- and moderate-income people.
6.
6. WATER & SEWER INFRASTRUCTURE
Improvements to Infrastructure Broadband Specifically
Assist in meeting the critical need for • Target support to households and businesses
investments and improvements to existing that do not deliver 25 Mbps download/3 Mbps
infrastructure in water, sewer, and broadband upload
• Fund projects that deliver reliable services:
minimum 100 Mbps download/100 Mbps
upload
PROJECT EXAMPLES:
• Funds may be used for necessary investments in infrastructure, such as a state’s clean water
revolving fund and drinking water revolving fund. Other uses include building out broadband
infrastructure for underserved households and businesses.INTERIM FINAL RULE SPECIFICS Eligible entities must be certified for recovery funds. Treasury has released certification guidelines and opened the electronic “portal” for requesting recovery funds. Before requesting funds, counties should complete the following: (1) ensure they have a DUNS number, (2) ensure they have an active SAM registration, and (3) gather payment information, which includes an EIN number, county executive information, and bank information. Funds MUST be requested through this portal, so it is important to complete these administrative steps first. As a note, for many of the enumerated eligible uses of funds, more specific projects or activities under the guidelines’ provisions are highlighted in corresponding relevant statutes for a relevant act or agency that has already determined what is eligible under certain language. For example, in the language regarding eligible uses the guideline highlights that funds can be used to invest in “necessary infrastructure” and one of these provisions states that “projects or activities of the type that would be eligible under section 603(c) of the Federal Water Pollution Act.” So, throughout the final interim rule, eligible uses are explicitly defined under existing statutes or more broadly defined by Treasury, or a combination of both. Thus, during the process of identifying projects for funding, it is recommended to determine first if there is already explicit language relevant to what you are looking to fund. If not, defer to the Treasury Rule. KEY DATES RELATED TO RECOVERY FUNDS Date Description 1/27/20 Declaration of Public Health Crises 3/3/21 Beginning of Fund “covered period” 7/9/21 Deadline to comment on Interim Report to Treasury 8/31/21 Deadline to submit first Interim Report to Treasury 8/31/21 Deadline to submit County specific report (those that have > 250k people) 10/31/21 Deadline to submit 1st Quarterly Project & Expenditure Report (ALL counties) 12/31/24 Recovery funds must be obligated 12/31/26 Recovery Funds must be spent, all work/performance must be completed
INELIGIBLE USES
PENSION FUNDS
• Funding cannot be used for deposits into defined benefit pension funds
• However, Treasury defines a “deposit” as an extraordinary contribution to a pension fund for
the purpose of reducing an accrued, unfunded liability
• Recipients may use funds for routine payroll contributions to pensions of employees
whose wages and salaries are an eligible use
OTHER RESTRICTIONS
• Funding debt service, legal settlements, or judgements
• Deposits to rainy day funds or financial reserves
• Non-federal match requirement (I.e., EDA & Medicaid) and be sure to read the latest FEMA
guidance
NET REDUCTION IN TAX REVENUE
• If a state or territory has a reduction in net tax revenue, they must demonstrate how they paid
for the tax cuts from a source other than the Recovery FundREPORTING REQUIREMENTS Recovery Fund recipients will be required to submit an interim report, quarterly report, quarterly project and expenditure reports, and an annual recovery plan INTERIM REPORTS • Counties will be required to submit one interim report, which will include the county’s expenditures by category at the summary level. • Interim reports are due by August 31, 2021. QUARTERLY PROJECT & EXPENDITURE REPORTS • Counties will be required to submit quarterly project and expenditure reports, which will include financial data, information on contracts and subawards over $50,000, and other information regarding utilization of funds. • These reports will be like those required for the CARES Act Coronavirus Relief Fund. The first report will cover spending from the date the county receives Recovery Funds to September 30, 2021. The first report is due by October 31, 2021. RECOVERY PLAN PERFORMANCE REPORTS • Counties will be required to submit an annual recovery plan performance report, which will include descriptions of projects funded and information on performance indicators and objectives of each award. • Local governments with fewer than 250,000 residents are not required to develop a Recovery Plan Performance Report. The recovery plan is due by August 31, 2021 The section below highlights the deployment of ARP funds to agencies that are relevant to economic and workforce development for reference. This includes the U.S. Department of Education, the U.S. Economic Development Administration, and the United States Department of Agriculture. These funds will likely be competitive or must comply with agency mandates.
DEPARTMENT OF EDUCATION
Overview
The American Rescue Plan will provide funding to each State, Puerto Rico, and the District
of Columbia in support of their efforts to reopen K-12 schools safely and equitably while also
expanding opportunities for students who need it most.
FUNDING OVERVIEW: APPROXIMATELY $165 BILLION
PUBLIC K-12 EMERGENCY RELIEF FUND
• $122.7 billion for the K-12 General Stabilization Fund
• LEAs are required to use at least 20% of funds received to address learning loss caused
by the pandemic
• Up to 80% can be used for operations, staffing, programming, and infrastructure
upgrades to transition to in-person learning, reduce the risk of COVID-19 transmission,
and make buildings healthy and environmentally safe.
• $800 million is included to help children experiencing homelessness
• Stipulations for Use
HIGHER EDUCATION
• $40 billion to colleges and universities through the Higher Education Emergency Relief Fund
(HEERF)
• $36 billion for public and nonprofit institutions of higher education
• Institutions are required to direct 50% of their funding to students in the
form of emergency grants
• $3 billion for Historically Black Colleges and Universities (HBCUs), Tribal Colleges and
Universities (TCUs) and other Minority Serving Institutions (MSIs)
• $198 million for institutions with the greatest pandemic-related needsDEPARTMENT OF EDUCATION
STATE SPECIAL EDUCATION GRANTS
• $3 billion in formula grants for special education programs. Three types of programs can be
funded through the Department of Education:
(1) programs for students with specified disabilities between ages 3-21
(2) programs for infants and toddlers with specified disabilities ages birth-2 years
(3) programs for students with specified disabilities between ages 3-5
• Breakdown of funding and restrictions
PRIVATE K-12 EMERGENCY RELIEF FUND
• $2.8 billion in funds will be awarded to Governors under the Emergency Assistance to Non-
Public Schools Program
• The goal is to provide services or assistance to non-public schools that enroll a significant
percentage of low-income students and are most impacted by the pandemic
• Funds are available until September 30, 2023ECONOMIC DEVELOPMENT
ADMINISTRATION (EDA)
Overview
The Rescue Plan provides funds for EDA Economic Adjustment Assistance grants. These grants
support a wide range of technical, planning, and public works and infrastructure assistance in
regions experiencing adverse economic changes. A quarter of the authorized funding must go to
assisting states and communities that have suffered economic injury as a result of job and gross
domestic product losses in the travel, tourism, or outdoor recreation sectors.
FUNDING OVERVIEW: APPROXIMATELY $3 BILLION
ECONOMIC ADJUSTMENT ASSISTANCE
• $3 billion in to support small businesses responding to and/or recovering from economic
effects of COVID-19
• Economic Development Assistance Programs to prevent, prepare for, and respond to
coronavirus:
• Including necessary expenses for responding to economic injury as a result of
coronavirus
• $750 million carve-out to states and communities suffering losses in travel, tourism, and
outdoor recreation
• EAA is primary funding line administered by EDA
ELIGIBLE EAA APPLICANTS:
• Counties, Cities, and Townships
• Special purpose government units engaged in economic development
• Institutions of higher education
• Public/private non-profits acting in cooperation with officials of political subdivisionsUNITED STATES DEPARTMENT
OF AGRICULTURE (USDA)
Overview
The American Rescue Plan Act seeks to address the cumulative effects of discrimination among
socially disadvantaged producers with a program of debt relief and long-term racial equity work.
The funding is broken down into four overarching sections as seen below:
FUNDING OVERVIEW: APPROXIMATELY $6 BILLION
NUTRITION ASSISTANCE
• The ARP provides bold solutions that work toward the goal of ending food insecurity by
providing:
• Expanded access to the Pandemic EBT (P-EBT) Program
• Expanded access to the Supplemental Assistance Program (SNAP)
• $880 million to Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC)
• $37 million for senior nutrition through the Commodity Supplemental Food Program
• $1 billion in nutrition assistance for territories
SUPPORTING FARMERS & STRENGTHENING FOOD SUPPLY
• To respond to disruptions in the food supply chain caused by the COVID-19 pandemic, the
American Rescue Plan makes long-term investments to increase the resiliency of the food
supply in the future by:
• Increasing the food available for distribution to help families in need
• Providing grants/loans to reimburse PPE and other equipment to keep food workers safe
• Investing in infrastructure and retooling support for various food systems
ENSURING EQUITY FOR FARMERS OF COLOR
• Key steps in assisting marginalized communities through a varied approach:
• $4 billion toward debt relief for socially disadvantaged farmers
• $1.01 billion in funding to USDA to create a racial equity commission and address
longstanding discrimination across USDA
STRENGTHENING INFRASTRUCTURE, HOUSING, & HEALTHCARE IN RURAL AMERICA
• The American Rescue Plan implements funding that invests in the people of Rural America:
• $500 million in Community Facility Program funds
• $100 million in rental assistance for low-income and elderly borrowers
• $39 million to help refinance direct loans under the Single-Family Housing Loan Program
and the Single-Family Housing Repair Loans and GrantsREFERENCES National Association of Counties - Preliminary Review of Treasury’s Fiscal Recovery Fund Guidance: https://www.naco.org/sites/default/files/documents/NACo%20Preliminary%20 Overview%20of%20Treasury%20Guidance%205.11.21.pdf U.S. Treasury, 31 CFR Part 35, Coronavirus State and Local Recovery Funds: https://home. treasury.gov/system/files/136/FRF-Interim-Final-Rule.pdf National Association of Counties – US Treasury Releases New Guidance on Certification Process for State and Local Fiscal Recovery Fund: https://www.naco.org/blog/us-treasury-releases-new- guidance-certification-process-state-local-fiscal-recovery-fund-0
For more on the American Rescue Plan or to discuss the creation of plans and programs to put funds to use in your community contact us at info@tpma-inc.com.
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